Telecoms: EU must regain position as world leader

Written by Miapetra Kumpula-Natri on 4 July 2016 in Opinion
Opinion

Europe must strive to regain its position as a world leader in the digital sector, while ensuring no one is left behind, writes Miapetra Kumpula-Natri.

Miapetra Kumpula-Natri | Photo credit: European Parliament audiovisual


Look at your smartphone. Where was it made? The hardware was mostly produced in Asia, while the software comes from North America. As European citizens, we buy and use things that are produced elsewhere. This must stop - The European Union must reclaim its place as the leader in the digital world.

To get there, we'll need at least three things. First, we must have great networks. Second, the internet needs to be accessible and inexpensive everywhere in the EU. And finally, we need good legislation and a governance structure that ensures quality regulation.

An important part of the digital single market is the telecoms market - an area in which Europe used to be a leader. It's not that we are currently doing very badly. We still have companies that can take us to the top.


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The European Commission has the challenging task of bringing forward the right tools when it published its vision for how the European telecoms should look in the coming decades.

The college is due to introduce its telecoms package in September. We need reforms to help boost business but also, quite simply, to be able to handle mobile internet traffic, which by 2020 will be almost eight times higher than it is today.

This spring, it was announced that roaming charges would drop in May. This was one step towards the full abolition of roaming charges by June 2017. To this end, on 15 June the Commission published a proposal to regulate the telecoms wholesale roaming market. The schedule is tight, but manageable.

In addition, timely conclusion of spectrum allocation is crucial in order to make room for new mobile services. This means that frequency band 470-790 MHz, mainly used by broadcasters, will be made available for mobile services. This will improve internet access everywhere in Europe and pave the way for the telecoms review. 

First, the networks. As an engineer, I could talk about inspiring technical innovations all day, but I'll spare you that and get directly to the political questions. Digital infrastructure is a precondition for economic growth and job creation. Regulation applied to fixed broadband networks has a major impact on operators, on their capabilities and their incentives to invest in new networks.

I'd like to hear the Commission's views on questions like, how to boost the roll-out of ultra-fast broadband networks in Europe? Or on how we establish the right conditions to promote investments in new generation networks? And how we ensure that Europe becomes the world leader in 5G?

With 3G, European companies were better than anywhere else. Unfortunately, with 4G things didn't evolve as smoothly, and we are falling behind. 5G, however, is a chance Europe must not waste, especially as the top providers are European.

Second, accessibility, coverage and prices. The digital divide must not become a new source of social exclusion. Not between the old and the young, not between rural areas and cities, not between women and men, and not between the rich and the poor. 

To be able to shift to a digital society and rely on the digital public and private services we must ensure that all Europeans have an opportunity to access them. On the other hand, we need infrastructure to cover the rural areas for our self-driving cars and the flourishing digital industries need competitive prices. 

Third, governance and legislation. We must ensure that regulatory policy enables all players in digital communication, whether or not they are traditional operators, whether they are big or small, to invest, innovate and compete in a fair market. The governance structure for telecoms markets needs to ensure flexibility for first movers. 

It is up to the Commission to assess the powers of the body of European regulators for electronic communications (BEREC) and national regulatory authorities. During the debates on the digital single market, Parliament hoped to see a stronger BEREC.

Future regulation should focus on competition. It pushes companies to be more innovative and efficient and offer services at competitive prices. This generates user demand, which, again, generates innovation and drives prices down.

We must avoid a situation where dominant companies are able to use their market power to squeeze out the competition. Europe should aim for digital markets that are devoid of monopolies and duopolies, old or new; competition is the driving force behind new solutions. This will benefit citizens.

Deregulation, if taken too far, can be a lose-lose scenario. In the US, 4G developed faster than in Europe. 

However, we have also seen that the lack of competition in the US market resulted in severe market failures and higher prices. The level of investment dropped by 55 per cent after deregulation of access to the networks took place in 2005. Europe needs to find its own way. There is no other market to copy.

The way I see it, more and more of these so-called telecoms services are being provided by companies from other sectors. New disruptive technologies are not necessarily linked to telecoms companies. At the same time, traditional telecoms operators are already broadening their services by simply connecting two elements.

Just look at 5G and the Internet of Things: thousands of micro-networks connecting houses, cars, public spaces and workplaces.

These new opportunities are crucial for future European jobs and our society as a whole. What I want to see in Europe is a modern connected society with legislation fit for future, trusted digital services and digitalisation that is both secure and socially inclusive.

 

About the author

Miapetra Kumpula-Natri (FI) is Parliament's S&D group shadow rapporteur on towards a digital single market act

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